Effect Of Local Government Behavior On The Independent Innovation Of Enterprise Based On Fiscal Decentralization

The global economic growth is slowing down after the 2008 economic crisis, yielding a new round of restructuring and China’s new normal. China is also looking for renewed sources of growth under the pressure of intense international competition and pressing domestic transformation. Extensive economic growth model is no longer meet the new requirements of economic development, innovation will be the next engine of economic growth. Enterprise itself is undoubtedly the main body of innovation, however, the business innovation has high investment and high risk combined with the information asymmetry, monopolies and external factors, it is not sufficient to optimize the allocation of resources if only depend on market regulation. The government has more resources and authority especially the short-sighted objective function, which has an important impact on the innovation of business after the fiscal decentralization. Therefore, study and standardize the behavior of local governments to support business innovation is an important issue and urgent needs for us.In this study, firstly, we sorted out the relationship between our government and businesses, then we reviewed the history of China’s independent innovation and achievement, and finally summarized the experience of newly industrialized countries such as Japan, South Korea and other countries which support business innovation. This article discusses the influence of independent innovation from three important local government behavior-control of local government officials’ corruption, fiscal decentralization and land finance. We use panel data of 30 provinces and select the patents number of companies, new product sales as the dependent variable, the number of public office filed criminal, revenue and expenditure decentralization, land finance as the core explanatory variables. At the same time, to guarantee the accuracy of the results, the number of civil servants to join the government, foreign direct investment per capita consumption level, fixed asset investment, research and development and other personnel were added as controlled variable, and then the multivariate regression model was constructed.Econometric test showed that all the explanatory variables reached a significant result to some extent. The following conclusions are obtained. First, the control of government corruption and innovation is an "U" relationship in the model of R&D funds as the dependent variable, therefore, control of post crime of local government officer will have a positive effect in the long term. Second, promotion mechanism for government officials has a negative impact on business innovation under the context of fiscal decentralization, therefore, change the level of the fiscal decentralization and establish a reasonable officer promotion incentives can promote independent innovation of enterprises. Third, land finance has an adverse impact on business innovation, therefore, include land finance into local government budgets and continue to explore new financing model will have a positive effect on innovation activities of enterprises.